Bhubaneswar. A major financial scam that raises serious questions over the credibility of the banking system has come to light, involving alleged misappropriation of ₹5.21 crore and irregularities in as many as 105 gold loan accounts. The case suggests that a bank official allegedly misused his authority to sanction loans using fake documentation and, in several instances, without any actual gold being pledged.
Fake Ornaments, Missing Files and a ₹5.21 Crore Trail of Deception
According to information, the accused, Prashant Kumar Mallick, was serving in a senior position at a bank branch and was responsible for verifying gold loan applications, checking documentation, and ensuring the safe custody of pledged gold ornaments. It is alleged that he misused this position and bypassed standard banking procedures for an extended period.
The matter came to light during a routine inspection conducted by senior bank officials in 2025. During the inspection, the official concerned was asked to produce gold loan-related documents, but he failed to provide the required files. Soon after this, suspicions over his activities intensified, and he reportedly fled from the branch.
FCRF Academy Launches Premier Anti-Money Laundering Certification Program
105 Gold Loan Accounts Under Scanner as Audit Uncovers Shocking Lapses
Following this, an internal audit was initiated at the bank level, which uncovered startling irregularities. The investigation revealed that a total of 105 gold loan accounts were affected. Of these, 31 accounts involved loans sanctioned against fake ornaments presented as genuine gold, while in 74 cases, loans were approved without any gold being received at all.
Loans Without Gold? Banking Safeguards Face Tough Questions
The audit report further highlighted that proper documentation procedures were ignored in several instances, and verification processes were reduced to mere paperwork. This indicated that the scam was not a sudden act but a well-planned financial manipulation carried out over a long period.
After the irregularities surfaced, the bank’s management conducted a detailed investigation and, upon confirming financial wrongdoing, filed a formal complaint. The accused remained absconding for a considerable time and frequently changed locations, making the search operation more difficult.
Sources involved in the investigation indicate that the case may not be limited to the actions of a single individual. Serious lapses in the system’s internal controls have also come under scrutiny. Concerns have been raised over inadequate physical verification of gold and weak documentation checks. The possibility of collusion at multiple levels has also not been ruled out.
Probe Now Turns to Possible Wider Collusion
After an extensive search, the accused was eventually arrested from Bhubaneswar. Following his arrest, he has been subjected to continuous interrogation to determine whether others were involved in the fraud and to trace the flow of funds linked to the scam.
The case has once again highlighted serious concerns regarding the transparency and security of gold loan processes in the banking sector. Experts believe that stricter verification of documents and physical gold at initial stages could have prevented such a large-scale fraud.
Meanwhile, the bank administration has begun reviewing its internal processes and is planning to strengthen control mechanisms to prevent such incidents in the future. A detailed probe into all related transactions and accounts is also underway, with investigators expecting to uncover further links in the alleged network.
